UNIFOR Ratifies, UAW Is Quiet, Ford Reacts To EV Demand Drop, New Collar Workers

October 16, 2023
Welcome to another amazing week in Retail Automotive. Today we discuss the weekend happenings in the ongoing strikes in Detroit and Canada. We also talk about the big changes in EV demand, as well as WalMart’s approach to finding and investing in talent.
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Show Notes with links:

While Canadian union UNIFOR ratifies the GM deal by over 80% getting factory workers back to work, all is quiet on the UAW front over the weekend. Is it possible that no news is good news?

  • After a brief 12 hour strike, a deal ensuring a nearly 20% wage increase for longtime workers over a three-year period, along with bonuses and other benefits has been ratified by the Canadian union.
  • Union President Lana Payne said at a press conference, “This agreement reflects true collective bargaining. Our goal was to bring more fairness and equity to auto workplaces and to lift everyone up. We did that.” 
  • Meanwhile, there have been no new strikes or moves announced by the UAW since Friday since Ford announced they were at the end of their bargaining rope. 
  • As of last week, over 39% of parts suppliers to the industry have said they have laid off workers as a result of the ongoing dispute and say that number could reach as high as 70%

A pair of Wall Street Journal articles over the weekend are highlighting the ongoing struggle to separate the EV hype from actual consumer demand as a leaked internal memo may be revealing the reality of a significant drop in Ford F150 Lightning orders.

  • While EV sales rose by 51% this year, the rate has decelerated and inventories are accumulating. Automakers are adjusting expectations, with some shifting focus to hybrids. Initial EV enthusiasts have made purchases, leaving a more cautious buyer base. This slowdown contrasts last year's demand surge.
  • “It doesn’t take a rocket scientist to figure out that our sales for the Lightning have tanked,” a UAW official wrote in a leaked memo, which was viewed by The Wall Street Journal. 
  • Ford is considering reducing shifts at its F-150 Lightning pickup plant due to declining sales after an initially strong performance.
  • The electric truck's sales have recently dropped, with a 45.8% decrease in U.S. vehicle sales in the third quarter.
  • Production had halted during the summer for a six-week expansion, affecting deliveries.

Retail behemoth Wal Mart is shifting its focus from degrees to skills, offering more short-form certificates, and investing $1 billion in career training by 2026. 

  • Currently, 75% of Walmart's salaried managers in the U.S. started in hourly positions.
  • Walmart is expanding its education benefits, now offering 25 short-form certificates in collaboration with Guild.
  • “Ultimately, Walmart believes the U.S. workforce system needs to transition to a system that recognizes and understands skills in the same way it recognizes and understands college degrees,” said Walmart in a press release. “This gives talented, skilled workers who do not have degrees the same benefits as people who do. Harvard Business Review refers to this approach as the new-collar workforce.”

Paul Daly: 0:31You know what, just when I think I can start the show right on a Monday, I can't press them all. And that was the weirdest start we've ever had. But either way, it's Monday October 16. We're talking about union stuff whether it's Canada the US Ford reacting the Evie demand drop and new collar workers. Calling represent if you're watching, you see that Kyle has got a fancy new background. It's been a long time coming. A little paint, a little shelves, the little stacking of stuff behind him. Looks amazing, dude, I'm

Kyle Mountsier: 1:05

telling you what, gray paint with the little bit of light with all that and I got look, I've got some shoe laces back here. I got your book. Look, I put a shot. I got the asoto look, I got Jason Rice's book. I'm telling you what we'll do going hold mine in that. Got our little Automotive News deal soccer. I don't think a lot of people have seen this if you're watching the video. There is so Robin Angus is always sending us like ridiculous memes and stuff like that. And he made this is the original investor crew for a so do kind of

Paul Daly: 1:39

like 1920 style gangster right? Just about just

Kyle Mountsier: 1:43

come in. It has the troublemaker logo right down there. It's legit. And for fairness

Paul Daly: 1:47

that came into the scene before we had these AI tools to say put these faces in this scene like that was old school, blood, sweat and tears. He did all of that man, we were traveling a lot last week. Got to spend some great, great time on the ground in Miami at the name ed conference. It was cool to see just some of the content that's come out of that we feature seminar email every day. Saw a little clip today in automotive news about Perry Watson the fourth and that dude is 52 years old

Kyle Mountsier: 2:16

dude. And he was running around like he was 32 It was unbelievable. Like he was into every room. Oh absolutely. And like we kept saying this the leadership within the name out organization is so poised so humble yet so determined at the same time. There's like this there's the striking balance of the way that they care for the community but also are extremely intentional about their goals and desires for that community. And it's it's like it's energizing to be around and be a part of so if you don't have it just on your mental calendar for next year, you should check out in a mad because it's growing like a weed. They had the largest tendons they've ever had. And the energy around the micro communities the macro communities within there are amazing. And they had some legit legit speakers this year. They did

Paul Daly: 3:13

they did really crushed it. So I also want to talk about a few things coming up this week. Wednesday, we are releasing Episode Two much awaited episode two of more than cars. Thank you so much for your patience on this one. Episode One was probably like, what, two months ago maybe maybe even a little more. We're so excited episode two, we filmed it all in one spot, beaver Toyota and coming Georgia. And boy we leaned in to the people and the stories we also leaned into the fun and you're gonna see Kyle and I getting their hands dirty and the fix stops in service in detail. With their personal trainer, straightening cars on the front line, Kyle's making some kind of like a bowl back in the commercial kitchen. So it's a whole lot of fun. And the stories we talked about are just unbelievable. We're talking about people almost on their deathbed. And the dealerships supporting them. We're talking about a women's only mentoring group that is literally changing the dynamic of lives and families. It's unbelievable. And by the way they sell a lot of cars have an amazing facility. But that's the side story. The main stories that people so that's Wednesday, how can people get there, Kyle? Is that gonna

Unknown: 4:20

go to more than cars.com or they're gonna go to LinkedIn or the TV sorry, and or they're gonna go to LinkedIn. And they're going to, they're going to head to the asoto page. It's the first event on there, that's going to be the best place to watch the stream. Because all your friends are going to be there you can comment interact, we'll be hanging out in the comments. And make sure and just like come all around it as a community and share in the love of more than cars.

Paul Daly: 4:44

I'll see you there and yeah, have have all your people on there. Let's just say that. It's awesome when more people are on the live stream and it actually helps get the word out more of the algorithm and so yes, we are asking you to get as many people as you can on that live stream because It matters to the entire movement. So thank you so much for that. Let's talk about some news. What do you think? Let's get into it. I feel a little bad playing the sad trombone. Because it feels like some kind of positive news. We say positive news coming out of the negotiations in the Union updates, while Canadian Canadians version of the UAW which is Unifor. They ratified the deal signed with GM by over 80% Getting factory workers back to work. That's great. The Canadians are back to work. And all this quiet on the UAW front over the weekend, Friday is when Ford basically came out and was like, Hey, we're kind of at the line or what would they was it was Thursday, Thursday tech. Oh, we talked about a Friday right Thursday came out talking about a Friday for was like, Hey, we kind of like have reached the limit, like we don't have any more money to talk about. There was really no new announcements on Friday. And the weekend was quiet. So I feel like when it's quiet is when actual progress is made.

Kyle Mountsier: 5:58

Yeah. Either everybody's looking around going what's going to drop or or, or things aren't getting done

Paul Daly: 6:04

at all. It's the old, what's wrong, nothing's wrong. That's what's wrong. So after a brief 12 hour strike, so this is back to the Canadian story, a brief a 12 hour strike. I don't know why this feels so Canadian. After a brief 12 hour strike a deal in searing nearly a 20% wage increase for longtime workers over a three year period, along with bonuses and other benefits has been ratified by the Canadian union. Canadian union president a lot of pain said at a press conference, this agreement reflects true collective bargaining. Our goal is to bring more fairness and equity to auto workplaces and lift everyone up. We did that. So in the

Kyle Mountsier: 6:42

11th hour, what happened was all the Canadians can do we're so sorry, we're so sorry. We're so sorry.

Paul Daly: 6:47

We're really gonna strike it. I wish we had Cirilo on. I know, it'd be so perfect because he wouldn't give us so much level of context because we're just a bunch of you know, I don't know what do they call Americans in Canada. jerks out there every Yank jerks, jerks that live globally. Meanwhile, there have been no new strikes or moves announced by the UAW since Friday since Ford had made their announcement last Thursday. And here's another little detail to the ongoing unfolding strike. As of last week, over 39% of parts suppliers in the industry have said they laid off workers as a result of the dispute and say that number could reach as high as 70% If things keep going the way they are. So that's the update. Right? Just things moving this week. I think we're gonna see some things this week. I think we were feeling a feeling some things. I think it's some good things, positive things.

Kyle Mountsier: 7:42

I can't at least nothing. I don't

Paul Daly: 7:45

know. I feel like we need a segue though. Just segue. Cindy, that pair of Wall Street Journal articles over the weekend are highlighting the ongoing struggle to separate the Evie hype from actual consumer demand as leaked as a leaked internal memo, maybe revealing the reality of a significant drop in sales of the Ford F 150. Lightning. So while evey sales rose by 51% this year, that rate has significantly decelerated and inventories are accumulating we know this automakers are adjusting expectations with some shifting focus to hybrids. You know the initial Evie enthusiasts have all bought their stuff. And now all the cautious buyers are left looking at hybrids. So basically, a UAW official wrote in a leaked memo they say it has nothing to do with the strike and nothing kind of nothing at all. But basically the memo that the the official the official said it doesn't take a rocket scientist to figure out that our sales for the lightning have tanked and this is as Ford is considering reducing shifts at the F 150 Lightning pickup plant. Due to the declining sales. The as the electric truck sales have dropped 45.8% in quarter three. That's a that's that's more than I guess it's a drop you call it that's dropped somewhere like a jump off the diving board Cliff dive. Yeah, production was halted for six weeks, as we talked about for factory expansion, but now they're saying like maybe we need the throttle back on the factory in general.

Kyle Mountsier: 9:17

Like that. This is staggering. It's and I love how it kind of set like the the look at what's the actual commit consumer demand versus what what's getting produced. And we're starting to see this gap now. We could recover this. There's a lot of changes, actually. The 2024 changes in the tax code could reinvigorate the Evie market. But still, we're just we're not getting the full picture I feel of what the OEMs are dealing with. I even saw a couple just anecdotes this over the weekend of news outlets saying basically all of these manufacturers are kind of falling into the hand of of Tesla and Elon Musk, where they just control the market. And they pointed everyone to this and all of a sudden, not everybody was equipped to to approach the market the way that they needed to. And Tesla is going to come out like the massive winner. So that's that's not me saying that. I'm just saying, no worries, there's still so much to be determined. And the speed at which adoption happens, is going to greatly like it will directly affect how these manufacturers are or are not profitable. And I think actually, it's really smart that like Ford and GM have started to spin off their Evie brands, because as separate profit centers at separate general Ledger's, you start to see like the the opportunity for them to completely control this in a different way, much more like a startup, which you see startups go through these ebbs and flows of massive increased a massive decrease, you feel like you're winning, you feel like you're losing, we know that all too well. And this is just an example of that.

Paul Daly: 11:03

You know, you mentioned the tax code. And what you mean by that is now dealers will be able to apply the federal tax credits, 7500 or whatever, it ends up being right onto the front end of the deal. And the consumer doesn't have to think about deal with tax credits or anything like that at all. Maybe that'll be it. I mean, obviously charging infrastructure, massive, massive roadblock to evey adoption and until you know, we were I feel like we were talking to somebody about trying to find places to charge their EVs and that they like, oh, they ended up going to the roof. Don't talk about who it is, but they haven't gone to the Ritz Carlton, because they're like, I know they'd happened Evie, charger. And if they didn't they figure out a way to get this car charged for me. Right?

Kyle Mountsier: 11:44

I'm actually I'm following. So John Ellis is going on like an 800 mile trip or something like that in a model three, and he's putting it all on YouTube for everyone. Kind of kind of interested. Like, I'm interested to see what his findings are just

Paul Daly: 11:59

as a travelers I've wanted to do that. I've wanted to do that for like, I just see some other people doing that. I'm like, Man, that sounds so much fun. It does sound like fun. We should do in a Tesla, we should do an A Tesla semi, we should just like vlog the heck out of it. Why not? So good. Being the Segway game is off this. Sorry about

Kyle Mountsier: 12:21

our Monday's everybody, we left you high and dry. Retail behemoth. Walmart is shifting its focus from degrees to skills offering more short term certificates in training and investing a billion dollars in training by 2026 1 billion by 2026. Currently, this is a crazy stat 75% of Walmart salaried managers in the US started in hourly positions. They're also moving to expand their education benefits now offering 25 Short Form certificates in collaboration with a training company called guild. It's interesting because the majority of their management staff across the US is actually not college educated. So they're moving in two directions. One, they're they're putting more money and time and energy into paying for and supporting people going through college degrees, but also creating their own training matrix. So that entry level positions actually see a career path. They actually retail is one of the lowest quit rates right now. And people are at 2.6%. It said, and people are seeing opportunities for career pathing because of the degree not required. And so basically, they're shifting all their job descriptions to make sure that degree not required is very specific in there. And they're going after the skill sets the soft and hard skill sets that people might have acquired from other work or just general knowledge. Quote, Walmart said in a press release, ultimately Walmart believes the US workforce system needs to transition to a system that recognizes as an understand skills in the same way it recognizes and understands college degrees. This gives talented skilled workers who do not have degrees the same benefits as people who do. Harvard Business Review refers to this approach as the new collar workforce. Which Paul, have you met some of the managers, I mean, frontline employees in a little retail environment to see them catching up.

Paul Daly: 14:25

I know, the auto industry included the article, it's like, ah, there might be something to this fact that there is talent in every corner of this country, if you're willing to invest in it, if you're willing to develop it, if you're willing to look at the actual skills that the person has now. It's just kind of one of those things that is more easily bubbled to the surface when it's like people skills, right? You see servers, you see people in food service, and you're like, how many we have lots of those stories like hey, do you want to sell cars right is the next question because they're like, but the truth is, is like there are a lot of other skills especially when it comes to fixed ops, technical training people that just have this knack to do a certain thing and being willing to provide a training path, provide a career path. And if you do that work in the front end, the bottom line is like, you don't have to be at the mercy of having someone having a degree or not a degree, especially in a time when there are a lot more people just booking on college. Right? I mean, a lot more people, and this is bad news for colleges,

Unknown: 15:29

obviously, it is bad news for colleges. And here's the thing, this is what I this is what I want to point to in this is that they're not just saying, oh, we'll hire these people. They're saying we're going to put them on a career path. And we're going to train them. And I think that that's the that's the important part that we can take away as automotive is it's not just time invested. It's real resources and dollars inserted, injected into your company, a billion dollars from Walmart, obviously, they're a massive organization spread across their retail units, but for an auto dealer to look at this and go Hmm, okay. There are other retail establishments saying, Yes, we believe the same thing that people come from any walk of life and come into this, but in order to keep them, retain them, see our company grow. It takes real time and money investment, to make them great.

Paul Daly: 16:20

I mean, not a billion, but do you have 50,000? Come on, right. 50,000? Yes, the answer is yes, you do all day. You do have it. Hey, whatever it is. We know paying attention to the people more than the product is how we all get ahead. Thanks for being with us here today. Go to more than cars.tv Join us on the live stream on Wednesday.

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